RIP Palm smart phones: HP's CEO indicates that the company plans to let the business die down and will not continue investing in webOS smart phones. (Source: Verizon)

World's biggest computer manufacturer said it merely bought Palm for IP for devices like tablets

Hewlett
Packard, the world's largest personal computer maker, is in a period
of transition. It's releasing
9,000 employees and hiring 6,000 new ones. And it
just purchased
Palm at the end of April for $1.2B USD.

That
acquisition gives HP access to webOS, a powerful mobile internet
device operating system. HP is already rumored to be cooking up
a webOS tablet -- dubbed
"Hurricane". However, according to Mark Hurd,
HP's Chief Executive Officer, the company is not planning to launch
or market new Palm smart phones.

Hurd commented at
a Bank of America Merill Lynch technology conference, "We didn’t
buy Palm to be in the smartphone business. And I tell people that,
but it doesn’t seem to resonate well. We bought it for the IP. The webOS is one of the two ground-up pieces of software that is built as
a web operating environment…We have tens of millions of HP small
form factor web-connected devices…Now imagine that being a
web-connected environment where now you can get a common look and
feel and a common set of services laid against that environment. That
is a very value proposition."

He adds that the company
isn't going to "spend billions of dollars trying to go into the
smartphone business; that doesn’t in any way make any sense."

The
idea that HP bought Palm only to turn around and let the veteran
smartphone maker's core business die indeed strikes some as bizarre.
Adding to the confusion is that HP's rival Dell is soon going to
be unleashing
smartphones powered by Android OS and Windows Phone
7.

However, HP seems dead set not to spend the money required
to continue to design and produce smartphone handsets. In that
sense, webOS smartphones have become a threatened species -- past the
current generation, it sounds unlikely that any new hardware will
arrive.

Instead, HP will use its webOS assets to power devices
such as tablets
or web-enabled printers. It also looks to use other assets
in Palm's rich intellectual property portfolio, a byproduct of its
pioneering role in the PDA and smartphone movements. In that
sense, even if HP sticks to its word about smartphones, its modest
investment may soon pay off.

When we look at the market, we see an array of interconnected devices, including tablets, printers, and of course, smartphones. We believe webOS can become the backbone for many of HP's small form factor devices, and we expect to expand webOS's footprint beyond just the smartphone market, all while leveraging our financial strength, scale, and global reach to grow in smartphones.